Unnegotiated Delaware Forum Clauses Can Yield to Oklahoma’s Fundamental Public Policy

1. Introduction

The Delaware Supreme Court held that a Delaware forum-selection clause incorporated into an employee’s equity-compensation arrangements did not establish personal jurisdiction over an Oklahoma resident. Although the relevant agreements selected Delaware law and the equity issuer was a Delaware limited partnership, ordinary choice-of-law principles required application of Oklahoma law to the forum provision. Under the court’s interpretation of Oklahoma decisions, the provision was unenforceable because the parties had neither negotiated nor discussed it.

The decision establishes two connected principles. First, a dispute over a forum-selection clause does not become an internal-affairs dispute merely because the clause appears in an entity’s governing agreement. Second, Delaware’s generally favorable treatment of contractual forum provisions can yield to another state’s fundamental policy under the Restatement’s choice-of-law framework.

The ruling concerns jurisdiction, not the ultimate enforceability of the employee’s restrictive covenants. The Supreme Court also declined to decide whether Delaware law, if applicable, would have permitted enforcement of this particular forum provision.

2. Background and Issues Presented

The employment and equity arrangements

GI DI Rushmore Parent LP, a Delaware limited partnership, owns Clarity Telecom, LLC, doing business as Bluepeak. Bluepeak provides telecommunications services in several states. Donald E. Stoops, Jr. served as its Vice President, Market Development, from June 2021 until April 2026, living and working in Oklahoma throughout that period. He resigned after accepting a position with Dobson Fiber, a competitor.

As part of his compensation, Stoops received incentive units representing approximately 2% of Rushmore’s management incentive pool. The Unit Agreement granting those units made him a Rushmore limited partner and imposed vesting conditions and restrictive covenants. The noncompetition, nonsolicitation, and confidentiality covenants purported to operate during his employment and for two years afterward; the nondisparagement covenant purported to operate indefinitely.

The Unit Agreement incorporated Rushmore’s Partnership Agreement by reference. Stoops also signed a Joinder Agreement incorporating the Partnership Agreement. Although he acknowledged receiving and reading the Partnership Agreement, he had neither received nor read it when signing and had not requested a copy. His first request to view it came in February 2024, more than two-and-a-half years later.

Both the Unit Agreement and Partnership Agreement selected Delaware law. Only the Partnership Agreement contained a Delaware forum-selection clause. That clause covered interpretation and enforcement of the Partnership Agreement and related agreements.

The jurisdictional dispute

After Stoops joined Dobson Fiber, Rushmore sued in the Court of Chancery for preliminary and permanent injunctions and damages. Its sole asserted basis for personal jurisdiction was the forum-selection clause.

The Court of Chancery dismissed the action. It concluded that Oklahoma law governed the disputed provisions and that an Oklahoma statute invalidated the forum clause. Alternatively, it held that enforcement would be unreasonable under Delaware law because Stoops lacked notice of the clause.

On appeal, Rushmore argued that Delaware was the state whose law would apply absent a contractual choice, that Delaware and Oklahoma law did not materially conflict, and that the internal-affairs doctrine independently required Delaware law. These arguments presented three central questions:

1. Was enforcement of the forum clause an internal-affairs matter?
2. If ordinary choice-of-law rules applied, did Oklahoma law displace the contractual selection of Delaware law?
3. Without an enforceable forum clause, could Delaware exercise personal jurisdiction over Stoops?

3. Summary of the Opinion

The Supreme Court affirmed, but its reasoning differed materially from the Court of Chancery’s statutory analysis.

• Internal affairs did not control. Relying on the distinction between internal affairs and broader intracorporate affairs, the court held that the forum-clause dispute required ordinary choice-of-law analysis.
• Oklahoma was the default state. Stoops signed and performed the equity-for-services arrangement in Oklahoma. The remaining relevant contacts were neutral.
• A fundamental policy conflict existed. Delaware generally enforces otherwise-valid forum clauses without requiring individual negotiation. The court read Oklahoma decisions as requiring specific negotiation or discussion.
• The clause failed under Oklahoma law. Neither party disputed that they had not negotiated or discussed it.
• No alternative jurisdictional basis existed. Because Rushmore relied exclusively on the clause, its unenforceability required dismissal.

The Supreme Court did not adopt the proposition that Oklahoma’s access-to-courts statute itself categorically prohibits out-of-state forum clauses. Nor did it reach the alternative Delaware-law notice ruling or the merits of the restrictive covenants.

4. Legal Reasoning

A. A governing-agreement provision is not necessarily an internal-affairs matter

The internal-affairs doctrine ordinarily assigns an entity’s internal governance questions to the law of its state of formation. Rushmore argued that its Delaware formation and the clause’s location in its Partnership Agreement made Delaware law mandatory.

The court rejected that reasoning by distinguishing the location of a provision from the legal character of the dispute. Drawing on Salzberg v. Sciabacucchi, it explained that core internal-affairs claims differ from the broader category of intracorporate claims. Forum-selection provisions can regulate the latter without becoming matters that the internal-affairs doctrine necessarily reserves to formation-state law.

The practical consequence is important: placing a forum clause in a partnership agreement, rather than directly in an employment or compensation agreement, does not automatically insulate it from conflicts analysis. The opinion does not, however, eliminate the internal-affairs doctrine for genuine governance disputes.

B. Contractual choice of law is presumptive, not absolute

The court applied Section 187(2) of the Restatement (Second) of Conflict of Laws. A contractual choice generally governs unless either:

1. The chosen state lacks a substantial relationship to the parties or transaction and there is no other reasonable basis for choosing its law; or
2. Applying the chosen law would contravene a fundamental policy of another state that has a materially greater interest in the particular issue and whose law would otherwise apply under Section 188.

These exceptions are alternatives. Delaware’s substantial connection to Rushmore therefore answered only the first exception; it did not foreclose the second.

The second exception requires more than a difference between two states’ laws. It requires a fundamental-policy conflict, the requisite comparative interest, and identification of the state whose law would apply without the contractual choice. The opinion developed its conclusion through Oklahoma’s contractual contacts and its protective forum-selection jurisprudence, rather than through a lengthy, separately labeled comparative-interest analysis.

C. Oklahoma had the most significant relationship to the compensation arrangement

Section 188 directs courts to assess relevant contacts according to their importance to the particular dispute, rather than simply count them.

The distinction between performance and subject matter was decisive. Rushmore’s argument that the units were associated with Delaware did not establish that the contract was performed there. Stoops performed by working in Oklahoma and earning vested units over time. Delaware formation was relevant, but did not outweigh the service-related contacts.

D. Fundamental public policy can be expressed through judicial decisions

The Restatement recognizes that a fundamental policy may appear in legislation prohibiting certain contracts or protecting people from oppressive uses of superior bargaining power. The Supreme Court expressly reasoned that judicial decisions can embody such a policy as well.

This mattered because the court did not accept the Court of Chancery’s statutory rationale. Oklahoma’s statute protects access to “ordinary tribunals,” which the Supreme Court understood as judicial forums, not necessarily Oklahoma forums. The operative policy instead emerged from Oklahoma cases addressing unnegotiated clauses and unequal bargaining power.

E. Oklahoma precedent supplied a predictive, not entirely uniform, rule

The court acknowledged variation in Oklahoma decisions. Some treated lack of negotiation as independently sufficient to invalidate a forum clause. Another emphasized lack of negotiation together with limited bargaining power.

Nevertheless, the Supreme Court concluded that Oklahoma would not enforce this clause because the parties had never specifically negotiated or discussed it. That was a prediction based on Oklahoma intermediate appellate decisions, not an application of a controlling Oklahoma Supreme Court ruling directly resolving the issue.

Stoops’s signed acknowledgment that he had received and read the incorporated agreement did not alter the undisputed absence of discussion or negotiation. The court resolved the case on that Oklahoma-law ground, without deciding what effect the acknowledgment would have under Delaware law.

F. The jurisdictional consequence followed from Rushmore’s exclusive reliance on consent

A forum-selection clause can constitute consent to personal jurisdiction. Here, however, the clause was unenforceable under the governing law. Stoops was an Oklahoma resident with no Delaware contacts, and Rushmore asserted no independent jurisdictional basis. The court therefore affirmed dismissal and denial of preliminary relief without adjudicating the underlying covenant claims.

5. Precedents Cited and Their Influence

A. Internal affairs and entity-related forum provisions

Edgar v. MITE Corp., 457 U.S. 624 (1982)

This decision supplied the foundational description of the internal-affairs doctrine: one state should have authority to regulate an entity’s internal affairs. It framed Rushmore’s argument, but did not resolve whether the particular forum dispute belonged within that category.

Salzberg v. Sciabacucchi, 227 A.3d 102 (Del. 2020)

This was the principal authority for rejecting automatic application of Delaware law. Its distinction among internal, intracorporate, and external affairs allowed the court to classify the forum-clause dispute outside mandatory internal-affairs treatment. Its discussion of federal-forum provisions supported the conclusion that provisions regulating intracorporate litigation need not themselves involve core internal affairs.

The opinion also referenced 8 Del. C. § 115, which protects access to Delaware courts for internal corporate claims. That protection helped illustrate why core internal claims and broader intracorporate matters must remain distinct.

B. Choice-of-law methodology

Certain Underwriters at Lloyds, London v. Chemtura Corp., 160 A.3d 457 (Del. 2017)

This decision supplied both de novo review of contractual choice-of-law determinations and the Restatement framework. Its recognition of multiple layers of Restatement guidance supported a substantive examination of relevant contacts rather than treating the Delaware-law provisions as conclusive.

Focus Fin. Partners, LLC v. Holsopple, 241 A.3d 784 (Del. Ch. 2020)

The court cited this decision for the principle that Section 188 contacts must be evaluated according to their relative importance to the dispute. It supported the qualitative emphasis on Stoops’s Oklahoma performance, rather than mechanically balancing every contact equally.

C. Oklahoma’s treatment of forum-selection clauses

Eads v. Woodmen of the World Life Insurance Society, 785 P.2d 328 (Okla. Civ. App. 1989)

This decision supplied the central Oklahoma framework. It identified lack of bargaining, use of a form employment contract, unreasonable favorability to the drafter, and unequal or unfair bargaining power as indicators of unreasonableness. It was the highest-level Oklahoma decision addressing the issue identified by the Delaware Supreme Court.

The Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (1972)

Quoted through Eads v. Woodmen of the World Life Insurance Society, this decision supplied the demanding inconvenience formulation under which the selected forum would effectively deprive a party of a day in court. The present appeal did not turn on that ground; it turned on the separate negotiation-related strand of Oklahoma law.

Adams v. Bay Limited, 60 P.3d 509 (Okla. Civ. App. 2002)

This decision treated the relevant objections disjunctively: lack of negotiation, overreaching or unfair bargaining power, or serious inconvenience could support invalidation. Its formulation strongly supported treating absence of negotiation as independently significant.

Howard Family Charitable Foundation, Inc. v. Trimble, 259 P.3d 850 (Okla. Civ. App. 2011)

This decision likewise supported invalidating clauses that the parties had not negotiated or discussed, or where meaningful choice was absent. It reinforced the conclusion that Oklahoma demanded more than the formal contractual assent ordinarily sufficient under Delaware law.

STI Trucking, LLC v. Santa Rosa Operating, LLC, 2021 WL 3604609 (N.D. Okla. Aug. 13, 2021)

The court cited this federal decision as additional support for the proposition that lack of negotiation or agreement on a forum term can make it invalid under Oklahoma law. It corroborated, rather than independently established, the state-law prediction.

Burggraf Servs., Inc. v. H2O Solutions, 369 P.3d 52 (Okla. Civ. App. 2014)

This decision complicated the analysis because it emphasized both the absence of negotiation and relatively little bargaining power. The Supreme Court acknowledged that it did not clearly use a disjunctive test, but observed that it neither required every factor identified in the earlier cases nor clearly imposed an additional prerequisite beyond lack of negotiation.

D. The rejected statutory analogy

Gemini Techs., Inc. v. Smith & Wesson Corp., 931 F.3d 911 (9th Cir. 2019)

The Court of Chancery had relied on this decision involving an Idaho statute protecting enforcement in Idaho tribunals. The Supreme Court distinguished that express geographic protection from Oklahoma’s reference to “ordinary tribunals.” The distinction prevented the Oklahoma statute from being treated as a categorical prohibition on selecting another state’s courts.

E. Delaware’s contrasting enforcement policy

UBEO Holdings, LLC v. Drakulic

The court cited this decision for Delaware’s general willingness to hold parties to executed agreements even when they have not read them. It illustrated the policy conflict with Oklahoma’s negotiation-focused approach, but did not establish that this particular clause would necessarily have been enforceable under Delaware law.

Mack v. Rev. Worldwide, Inc., 2020 WL 7774604 (Del. Ch. Dec. 30, 2020)

This decision supported the proposition that voluntarily accepting a contractual scheme can constitute consent to a forum clause imposed through that scheme, even without negotiating the clause itself. It sharpened the contrast between Delaware’s emphasis on contractual assent and Oklahoma’s greater concern with actual negotiation.

F. Procedural authorities and the judgment under review

CDX Holdings, Inc. v. Fox, 141 A.3d 1037 (Del. 2016)

This decision supplied clear-error review for factual findings, distinguishing factual review from the independent review applicable to choice-of-law questions.

Sunder Energy, LLC v. Jackson, 332 A.3d 472 (Del. 2024)

This decision supplied abuse-of-discretion review of preliminary-injunction rulings. Here, the absence of personal jurisdiction sustained denial of preliminary relief without requiring a merits assessment of the covenants.

GI DI Rushmore Parent L.P. v. Stoops, 2026 WL 1679305 (Del. Ch. June 10, 2026)

This was the decision under review and the source of many factual findings. Its result survived, but its statutory rationale did not become the Supreme Court’s rationale. Its alternative Delaware-law notice analysis likewise remained unreviewed.

6. Impact and Limits

Employee equity does not automatically displace local employment-related interests

The decision makes it harder to assume that granting equity in a Delaware entity will ensure Delaware adjudication of disputes arising from locally performed services. Courts must examine the actual compensation relationship and the particular issue, not merely the issuer’s formation documents.

Incorporation by reference may not resolve the relevant enforceability question

A signed acknowledgment and contractual incorporation can establish formal assent without establishing that a forum clause was negotiated or discussed. For arrangements with substantial Oklahoma connections, making the governing agreement available and expressly addressing the forum provision may reduce the particular risk identified here. Neither step guarantees enforcement under every potentially applicable doctrine.

The opinion does not impose a universal negotiation requirement

The result depends on Delaware’s choice-of-law rules and the Supreme Court’s prediction of Oklahoma law. It does not require negotiation of every Delaware forum clause. Different contacts, different governing state policies, or an independent jurisdictional basis could produce a different outcome.

The Oklahoma-law prediction remains important—and qualified

The court openly acknowledged variation among Oklahoma appellate decisions. Future litigants may therefore contest the reach of the negotiation requirement, especially on different facts or if Oklahoma’s highest court later provides clarification.

The covenant merits remain unresolved

The Supreme Court expressly confined its conflict analysis to forum selection. It did not decide whether the noncompetition, nonsolicitation, confidentiality, or nondisparagement restrictions were valid. Dismissal for lack of personal jurisdiction is not a determination that Stoops complied with the agreements or that Rushmore has no claim in another competent forum.

7. Complex Concepts Simplified

Personal jurisdiction

A court’s authority over a particular defendant. An enforceable agreement to litigate there can supply consent, but Rushmore’s asserted consent provision failed.

Forum-selection clause versus choice-of-law clause

The first identifies where litigation belongs; the second identifies which state’s substantive law applies. Selecting Delaware law does not automatically make a Delaware forum clause enforceable.

Default state

The state whose law would apply without an effective contractual choice. It was Oklahoma here because of the relevant contractual contacts.

Fundamental public policy

A sufficiently important state policy that can justify declining to apply the parties’ chosen law when the Restatement’s additional requirements are satisfied. Such policy can come from judicial decisions as well as statutes.

Internal affairs

Matters concerning an entity’s internal governance. A provision’s inclusion in a partnership agreement does not by itself make every dispute over that provision an internal-affairs issue.

Incorporation by reference

Making another document part of a contract by referring to it. Here, incorporation did not establish that the incorporated forum clause had been discussed or negotiated.

De novo review

Independent appellate review of a legal question, without deferring to the lower court’s legal conclusion.

8. Conclusion

The decision confirms that Delaware formation, employee equity ownership, and Delaware contractual clauses do not automatically secure a Delaware forum. Forum-selection disputes remain subject to substantive choice-of-law scrutiny unless genuinely governed by the internal-affairs doctrine.

Here, Oklahoma’s relationship to the compensation arrangement and its judicially expressed policy concerning unnegotiated forum provisions defeated the clause. Because that clause was Rushmore’s only asserted basis for personal jurisdiction, dismissal followed. The broader lesson is that contractual forum planning must account for the law and policies of the state where the employee actually works—not merely the law chosen in the documents.